The use of private business jets will triple over the next decade, driven by the introduction of relatively inexpensive “microjets,” the Federal Aviation Administration predicts.

The arrival of these very light jets could make corporate planes affordable to more companies and air-taxi services at smaller airports more viable financially. (The jets cost as little as $1.5 million, compared with $2.4 million for the cheapest corporate jets.) All that means more options for fliers. But in the process, beleaguered commercial airlines could lose high-paying customers.

The first of the new jets, the Eclipse 500, is expected to be certified by the agency after a safety review and is likely to be flying this year. The FAA said last week that it expects these jets to be popular enough to drive up use of privately operated jet aircraft by more than 10 percent a year over the next 12 years. By 2017, these twin-engine aircraft are expected to log 9.6 million flight hours, up from an estimated 3 million last year, the agency added in its annual forecast of aviation activity.

The agency predicted that 100 very light jets would be operating by the end of 2006, with the number growing by 400 to 500 aircraft each year after that and reaching nearly 5,000 by 2017. The General Aviation Manufacturers Association’s projections are similar; it says the industry is likely to produce 350 to 500 very light jets a year, with a maximum of perhaps 870.

“If the microjet and air-taxi phenomena are successful, it could mean great new travel choices,” says Gerald Bernstein, a partner in the Velocity Group, an aviation consultancy.
But not everyone accepts the FAA’s predictions.

In Business Travel Trends 2010 – Part 1 we found that businesses will begin doing away with any needless or excessive business trips. Travel protocols may turn out to be less restrictive, while companies will ramp up attempts to control travel-related hazards. Consumers will depend on merchants to become a motivating force in discovering “green” solutions and technology will continue to enhance the business traveler’s experience. Additionally, these significant business travel trends may evolve as well.

Merchants will persist in seeking out discounted distribution overheads. Pricing pressures will not diminish for suppliers, especially legacy carriers dealing with escalating competition due to new participants. Airlines and hotels will opt to reduce credit card fees, offering discounts in support of businesses willing to make use of lower-cost debit cards and/or new forms of payment.

Dynamic hotel pricing will soar. Revenue or yield management is expected to increase additionally within the hotel industry and dynamic pricing will turn out to be progressively widespread. Dynamic pricing could, however, put forward savings by streamlining the bid with regard to the proposal process as well as ongoing program administration.

Various dynamics will influence the competitive landscape. Several indicators pointed towards the single leading force concerning the airline marketplace as being the EU-U.S. Open Skies agreement. In addition to deregulation, the new fuel-efficient Airbus A380 as well as the Boeing 8 aircraft will influence competition on international routes by reducing approximately 15% in per seat expenses. On domestic routes, discount carriers will persist in exerting downward force with regard to fares and drive growth. Consequently, airline competition will, as you might expect, intensify in the short-term and diminish in the mid-term, with vulnerable participants either becoming acquired or completely displaced from the market. Concerning the hotel marketplace, supply will continue to remain short in major cities for the foreseeable future, despite the recent addition of new properties. With regard to ground transportation, seasonal price fluctuations are expected to be emphasized and rates will increase, indicating the higher cost of new vehicles

Merchants will progressively compartmentalize services as well as employ exclusive discounts. Customer liaison administration will additionally become more complex as suppliers gradually segment the market, looking for fresh ways to enhance the customer experience as well as seek out higher margins. With regard to the car and hotel industries, businesses will aim at various categories of corporate travelers through differentiated brands while aspiring to build loyalty among individual customers by way of customized services. At this point, the fundamental trend will be suppliers endowing travelers with enjoyment of their personal lifestyle wherever they are, softening the line between business and leisure.

Cooperation among industry participants will remain fundamental. Consumers as well as merchants have indicated the need for sincere dialogue in order to improve the industry. Consumers must be willing to appreciate suppliers’ constraints in order to possess more realistic expectations, while suppliers must be more than willing to have travel managers provide essential input as well as feedback. It was recommended that companies must not be afraid to make known their concerns with a view towards advancing their businesses

Will all of these predicted trends come to pass? It’s hard to say. Certainly many significant variations are possible. Obviously only time will tell, but at the very least it should prove interesting.